‘Do-Good’ Bonds Promise Social Change Investors Take on Faith

Social bonds that fund do-good projects are lighting up the debt market, driving investors to extend on faith into the increasingly popular offering with few boundaries on how they’re labeled and used.

Issuance of such bonds, mostly by governments, development banks, and multi-national organizations like International Financial Corp., has steadily grown in recent years. They have funded a range of causes, including educational equity, access to affordable transportation, and food supply protection. Pandemic-driven projects also helped to spur social bond issuance’s eye-popping jump last year to roughly $154 billion from $17.9 billion a year earlier, according to Bloomberg data.

The ...